Welcome back to this training series. In the last video we covered the basics of the interface. I’d recommend viewing that video first if you haven’t already. In this video, I’m going to show you how to go about building a plan from scratch. I’ll look closer at structuring your plan and how to enter your numbers.
But before we start I recommend pausing this video, grabbing a hot beverage of your choice and settling down comfortably as this video is a bit longer than the last one!
So, without any further delay, let’s start a new plan.
You’ll start with naming your plan and choosing various starting options. Every option here can be changed once you are inside your plan by going to settings so don’t be too worried if you are not sure what to enter here.
The date controls allow you to choose when you want to start planning from. If you are not up and running yet, perhaps pick when you anticipate first spending some money.
You can also choose the length of your plan which ranges from 1 to 5 years. One year plans can be useful for quickly checking if business ideas can actually work financially but generally it’s good to do at least 2 years. Successful startups are likely to make their money back in a later year anyway so it’s good to have the long view when planning. The longer the plan, the more uncertainty creeps in during the latter years, so only make them 5 years if you have a key reason to, such as a product roadmap that stretches out that far.
We also have VAT options. The VAT tools in Brixx are modelled on UK value added tax but can also be used for other countries with similar VAT laws. VAT can be setup on a component by component basis so all this control does is decide whether new components have VAT calculations turned on or off by default. Further VAT options can be found when you get inside your plan. Basically, if your company is VAT registered, turn this on.
Lastly, we have the default template. It’s definitely worth having this on as a new user as it provides a simple plan structure for you to build from, which I’ll demonstrate now.
Now we’re in, you can see the template structure here. It’s added a section for sales, overheads, staff and marketing.
Every item here is a suggestion, you can rename anything you like by double clicking on the name and delete unnecessary items by selecting them and pressing delete.
You can easily add and expand this plan too and I’ll get to that in a minute. First, let’s fire up some numbers and get the dashboard doing some work. I’m going to start with some general overheads.
It’s a good idea to start with costs if you are just beginning planning your business because it gives you an impression of just how much money you will need to make each month to breakeven. It can quickly highlight whether it’s a good or bad idea before you get too far down the line.
You can view and edit any component by single clicking the row, you’ll see your forecast for that particular activity fill the right hand panel. The default forecasting method for most components is to enter a number which will repeat every month. So, let’s enter £1000 a month for rent. Now that I have started editing this component, you’ll noticed the left side go dark. You’ll need to decide whether you want to commit or discard these changes using the buttons in the top right before moving on. I’ll save and close so I can view my dashboard.
You can see the cash flow chart has updated to reflect my rent costs going out every month. Now, that’s all very well but what if my rent goes up next year, or I’m paying something once a year or it’s just a one off cost all together! Well, let’s go back into the component to take a look.
Using the period dropdown I can change how often this number repeats, if at all. Quarterly will repeat every 3 months, yearly will repeat every 12 months, whilst one off will just do a single cost at the start of the component.
If I want my costs to vary each period then I can press ‘show as table’ which expands it into a grid where you can enter a custom forecast for each period. There are also quick ways of filling this grid with the ‘fill table’ button. You can enter a different repeating number by typing into the top box and pressing update table.
But you can also choose to grow this number. The rest of the options allow you to grow the initial number by either a percentage or a fixed amount stopping at a period you define. Here I’m entering an initial number of £1000, growing 10% each month for 6 months.
Since I certainly don’t intend to have premises that increases the rent every month, I’ll change this forecast back to £1000 a month to reflect a more realistic rent projection. Where this growth tool is more relevant is on income components where it’s useful for marking out some quick growth estimates for your sales forecasts.
I’ll manually add a price increase half-way through the year and then save and close. Again, you can see the dashboard reflecting this amount.
I have just been showing you a standard operational cost component so far. There are a number of different components in Brixx, designed for calculating different tasks. However, they all use similar controls to the operational cost.
Let’s head over to the Sales section and take a look at an income component.
As you can see, I have the same options as the cost with a repeating fixed number every month. Again I can change how often it repeats or expand it to a table and enter a custom amount.
However there are also a few more options here. To start with, I can switch over to ‘Income per unit’ which changes how this component calculates. You can now enter a price for your product and the volume of units you sell. Units can represent anything you like, bikes, cakes, subscriptions, consultancy hours, anything you like. Again, you can expand the unit volume to enter varying sales. You can also expand the unit price in case you want to implement a price increase at some point.
Further down, we also have an option for cost of sales and inventory requirements. These options both work in similar ways, so I’ll demo the cost of sales for now.
Let’s say this income is for cake sales. I’ll price them at £10 and sell 200 per month.
But it also cost something to make those cakes. You had to buy the ingredients to make them. This is an example of a direct cost where the cost is directly related to the sale. If you sell 100 cakes, you have to buy the ingredients for 100 cakes. The cost varies with the amount sold. Something like rent, on the other hand, you’ll pay the same amount whether you sell 1 cake or 100. This is an indirect cost.
Anyway, back to the component. If I press ‘Add cost of sales’ it actually adds a new component in the list on the left which I can name like any other component.
Let’s save out of this component. You can see my cake sales appearing on my dashboard, automatically calculating the result of my pricing and volume.
Now let’s open up the new cost of sales. You can see that the cost of sales component is visually connected to the cakes demonstrating that it looks at the numbers inside the income component to base its calculations on.
Like the income component, you have a few options at the top for how it calculates. The default is a percentage, meaning the cost will be a percentage of the income you entered. Since I’m currently making £2000 a month in sales, if I set this to 25% then my cost of sales will be £500 a month.
I can also change this to cost per unit, this will only work if you have your income set up with a unit price. Here I can say for example, I sell each cake for £10 and the ingredients per cake cost £2. It’ll then automatically look at the unit volume set in your income component to calculate the total cost per income. Since I’m selling 200 per month, this works out at £400.
The last option allows you to enter a custom amount that does not base its calculation on the income numbers.
I’ll set this to cost per unit and save.
Now when I hover over the cost bars, you can see the additional £400 per month coming in from the ingredient costs.
Ok, so next we’ll cover adding new items to the plan. To add more components to a group, press the ‘components’ button at the bottom of any group to bring up a new panel. Here you can see all the different component types available.
The rent example was an operational cost, whilst cakes was an income. Other common components you will use are the Employee component, which allows you to enter a number of employees and a salary, as well as a few other relevant options such as pension and national insurance.
Asset allows you to setup a purchase price, a depreciation rate and whether to sell it later in the plan or write it off. This is useful for large purchases such as vehicles, buildings or equipment.
Loans will allow you to choose an amount to borrow and set up interest and repayment options.
There are detailed guides on our helpdesk on how to use all of these, you can find a link in the video description below.
Click any of them to add it to a group and begin editing by clicking on the row in the way we described earlier. You can also add new groups and sections to the plan by clicking the buttons at the bottom of each panel.
To remove items, select them with the box on the left of a row, then press delete and confirm. You can also expand your plan through copying items. You can save a lot of time setting up components if you have one already set up how you need. So for example, let’s say I plan on selling several products set to a unit price and with a cost of sales attached to it like my Cakes. I can select this component and press copy. I can also copy an entire group at a time. Then it’s a case of renaming them and tweaking the numbers appropriately.
This is a good time to talk a bit about structure. You may be wondering why Brixx plans are built with sections and groups. Well, apart from keeping things nicely organised they also define how totals work in your outputs.
You can see when I hover over the bars in the dashboard, the cost is split out by the name of the section the cost is coming from. Here we have £1000 in overheads coming from the rent we set up. Above is the ingredient costs coming from the 4 products we have in the sales section. As you build you plan, you can use this to see how different parts of your business compare at a glance.
This is also the case in your reports as well. If I drill into the Cash Paid line on my cash flow, you can first see the names of my sections. I can drill in further to Sales, which show me my two product groups. I can drill into each of those to see the individual products.
Build your plan with this in mind so that you can quickly get totals for the parts of your business you want to see.
So, we have covered setting up a new plan, organising it and added some numbers. You can use the same techniques and tools shown here to build your entire financial plan. Don’t agonise too much over getting structure completely right or worrying which components to use. Get stuck in and you can always change things as you learn more.
That’s all for now, thanks for sticking with me through the video and I’ll see you next time!